As a renter, you might not know that your landlord is only responsible for insuring against damages to the structure of your home or apartment. That means, in the case of damage to or theft of your personal property, renters insurance will cover the expenses of repairing or replacing your property.

Your landlord might not require you to carry renters insurance, but going without could be financially devastating. Without renters insurance, the cost of replacing or repairing your belongings falls on your entirely. Additionally, if someone is injured in your apartment or by one of your pets, you can be held liable for these injuries. When compared to the amount you could spend in legal fees, renters insurance is well worth the relatively small monthly cost.

That being said, determining exactly how much renters insurance you need can seem confusing at first, since the amount of coverage you get can depend on many different factors.

Determining How Much Renters Insurance You Need

When shopping for a renters insurance policy, there’s no need to feel overwhelmed by the options. Even if you already have a renters insurance policy, or are renewing an old one, it’s a good idea to follow these steps to determine the right policy for you.

1. Find out what your belongings are worth

The value of your belongings is a crucial component of your renters insurance policy. Generally, the more possessions you have, and the more money they’re worth, the bigger policy you should get.

Simply estimating the cost of repairing your belongings is not enough — experts recommend you conduct a thorough home inventory to get the most accurate value of your belongings.

To complete a home inventory:

Use your smartphone or digital camera to take shots of each room in your home or apartment as well as up-close shots of your belongings.

Use these photos as well as any information you have about your belongings to create a detailed list of your belongings and their estimated worth.

Keep your home inventory in a safe place outside of your home, such as a safety deposit box at your bank.

When you’re tallying your belongings, don’t underestimate their value. Many people think their valuables don’t add up to much, and are left footing a hefty bill when the time comes to replace everything their policy didn’t cover.

2. Include personal liability coverage

If someone is injured inside of your home or your pet injures someone, you may be held liable. It is important to carry personal liability coverage as part of your renters insurance policy in the case that you face a lawsuit or are responsible for paying someone’s medical bills.

Before selecting a policy, make sure you speak with an agent about the amount of personal liability coverage you need. Various factors play a role in determining how much coverage you need, including your net worth, the value of your belongings, and other factors associated with your living situation, like a roommate or a pet.

3. Consider additional coverage

Certain circumstance may require you to obtain additional insurance coverage. For instance, most renters insurance policies to not cover damage from a flood or earthquake. This can be a problem in the greater New York City area, as basement-level and even first- and second-floor apartments have been damaged by storms in recent years.

Hurricane Sandy flooded the subway system and many of the tunnels to Manhattan, and as many as 2,000 homes in Long Island were deemed uninhabitable due to damage, according to Newsday. If you live in an area at higher risk for a natural disaster, consider purchasing additional coverage to stay protected.

Additionally, many renters insurance policies place a dollar limit on insuring certain belongings, so you may need to purchase an individual insurance policy to cover any belongings which exceed this dollar amount, like an engagement ring or a watch.

At the end of the day, there’s a lot to take into account when you’re selecting a renters insurance policy. Luckily, discussing your options with an independent insurance agent can provide you some clarity. They’ll be able to walk you through different coverage levels to find the right policy for you.